*** Guest Post by Sanjeev Sabhlok ***

No one in developed countries will be found living off a few coconut slices sold under the hot sun each day. So why is this man forced to waste his entire life in this totally insignificant activity? An answer is found in our politics.

This man could well have been a successful industrialist or entrepreneur given the right opportunities. But today, most Indians are either illiterate or unskilled. Socialists (most existing parties are socialist) have sentenced this man and millions of other Indians like him to a lifetime of miserable poverty. Politics is the key difference between success and failure.

The magic of free trade

Adam Smith showed in 1776 that we become richer each time we trade. Both sides gain. Free societies therefore do not indulge in the futile battle between winners and losers. Everyone can be a winner. Wealth creation is not a zero-sum game. The size of the pie is not fixed in free societies; it constantly expands. Even if a person’s relative share of the pie declines as the pie becomes larger (ie. inequality increases), each person still ends up becoming better off.

Adam Smith showed that if each of us produces things of the greatest value we can, and are allowed to maximise our personal gain, we will end up contributing the most to society. If everyone produces most effectively, a society’s total wealth will increase. Indeed, this is trivially obvious. So why did India discard Adam Smith and follow Karl Marx and the Fabian socialists instead?

The stark choice before India: success vs. failure

India will continue its bad policies if we continue to elect the same old corrupt socialist governments. Today, our governments are not held to account. Our municipalities do not clean up the roads nor provide well-lit foot paths. We do not get regular supply of water and electricity. All this is happening even as the quality of life in the West gets better each day through good governance.

If we really want to, we can get accountable governments in India very soon - governments that enable citizens to achieve their highest potential; governments that follow world-best policy. But it will mean changing almost everything we have done for sixty years. It will mean demanding the policies of freedom. It will mean that many of us will have to join active politics to promote freedom. Societies cannot change unless ideas are translated into action by real leaders.